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Oklahoma’s governor has called on U.S. President Donald Trump to declare the coronavirus pandemic an “act of God,” a step to help oil-producing states contend with a crude glut that caused futures prices to close below $0 last week for the first time.
“Over-production of oil continues to threaten the economy,” Governor J. Kevin Stitt said in a letter to Trump that Stitt posted on Twitter late on Saturday.
Oklahoma, we are in this together and we will get through this. pic.twitter.com/JSnNCWhXfz
— Governor Kevin Stitt (@GovStitt)
April 25, 2020
Declaring a “force majeure” or “act of God” would allow oil companies to halt operations without risking that land leases will be canceled for stopping production, Stitt said.
Oklahoma’s energy regulator said on Wednesday that producers could close money-losing wells without losing their leases, the first victory for struggling U.S. oil companies seeking relief from states after the market crash.
U.S. production reached a record-high of near 13 million barrels per day late last year, but the pandemic has cut global consumption by 20% to 30%, or up to 30 million bpd.